Information Technology (IT) companies account for nearly 43 percent of the forex revenues of listed firms, a report by Business Standard stated. This figure is up 22 percent from a decade ago.
As per the report, the listed IT services companies earned nearly ₹4.2 lakh crore through exports in FY22, up 15 percent from the ₹3.65 lakh crore a year earlier. In comparison, the forex revenues or exports of the rest of the BSE500 companies were down 11.9 percent to ₹5.6 lakh crore in FY22, added BS.
It further informed that in the last five years, the forex revenues of IT companies have grown at a compound annual growth rate (CAGR) of 11.3 percent from ₹2.48 lakh crore in FY17. Meanwhile, the forex revenues of the non-IT firms grew at an annualised rate of 3.5 percent during the period, noted the market daily.
Analysts told BS that this makes the IT sector crucial for India to manage and fund its persistent trade and current account deficit. A slowdown in IT exports will expand India’s external deficit, leading to currency depreciation, they added.
The IT sector not only brings a big chunk of India Inc’s forex revenues, it accounts for little forex expenses, unlike other export-oriented sectors such as oil and gas, and mining and metals, the report highlighted.
"The IT companies’ forex expenses were ₹1.9 lakh crore less than half their export revenues. In contrast, oil and gas companies and mining companies, which were the second- and third-biggest exporters in the corporate sector, were net importers, with their forex expenses exceeding forex earnings. As a result, the oil and gas companies, including Reliance Industries, had a forex deficit of ₹3.96 lakh crore last financial year, while for the metal and mining companies it was nearly ₹20,000 crore," pointed out BS.
Meanwhile, pharma companies were a distant second in terms of net exports at around ₹40,300 crore last financial year, followed by the automotive sector, including ancillaries, at ₹20,000 crore, and textiles and garments at around ₹5,800 crore, it added.